Bureau of Local Government Finance Opinion

May 31, 2011 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Ramon M. Zialcita General Manager Honda Cars Global City Bonifacio Global City, Taguig Sir : This refers to the letter dated April 12, 2011, of Ms. Maria Belinda U. Ramos, Group Finance Head, Honda Cars Makati, Inc. requesting confirmation that our letter dated June 7, 2010 is also applicable to Honda Cars Makati, Inc. and its dealerships namely: Honda Cars Makati, Honda Cars Pasig, Honda Cars Alabang and Honda Cars Shaw. The above request is being made in reference to our letter to Mr. George F. Blaylock dated January 16, 2004 confirming classification of car dealers of Quezon City as "dealer" in accordance with Sections 143 (b), 151 and 191 of the Local Government Code (LGC) of 1991, thereby amending this Bureau's ruling dated June 25, 1998. In this connection, and if Honda Cars Makati, Inc. and its dealerships are similarly situated as the car dealers of Quezon City, the ruling embodied in a letter dated December 9, 2003 addressed to Chato and Eleazar Law Office, copy attached, shall apply, the pertinent portions of which are quoted as follows: "(a) if a 'car dealer' can show proof that he entered into a dealership agreement with the producer or manufacturer of a car, he shall be classified as a 'dealer'; caEIDA "(b) if no dealership agreement can be shown, this Bureau's ruling dated 25 June 1998 shall prevail, thus, 'a business entity shall be considered a retailer when it sells directly to end-users. However, if it sells to retailers, then it shall be classified as a dealer. If it acts in both capacities, then it should segregate its sales as retailer and as a dealer in order that appropriate tax could be applied." We hope that this will help clarify matters. Very truly yours, (SGD.) MA. PRESENTACION R. MONTESA, CESO III Executive Director